Worlds of Education

Public education needs public investment, not private profit

published 12 June 2017 updated 12 June 2017

By Howard Stevenson, University of Nottingham 

It is nearly nine years since Lehman Brothers filed for bankruptcy in the USA and triggered the banking crisis that has blighted the world economy ever since. The company held over $600 billion in assets and it remains the largest bankruptcy in US history.

What has this got to do with education and public schools in 2017? The short answer is it has much to do with public schools in 2017, and that the dark shadow created by that crisis continues to impact children in schools all over the world.

Lehman Brothers may be the bank that tipped the system over the edge, but it was just one of many financial institutions that had abandoned service and stability for big bonuses and quick profit. Hence, the domino effect as a series of under-regulated and over-stretched finance houses followed Lehman towards collapse, and looked desperately to their governments to bail them out.

This is what plunged the global economy into a recession and the reason why so many governments have experienced such problems ever since. The impact on public investment is clear, and continues to be a major problem.

In research I recently conducted with colleagues at the University of Nottingham we looked at public investment spending in the European Union (EU) since the crisis, and in particular on education.  Many European Union countries were particularly badly affected by the crisis, not least because the EU finance rules make it very difficult for governments to adopt appropriate economic policies when a country faces negative economic growth.

Rather than invest in public services to boost demand and jobs, EU Member States are forced to cut their spending even more- creating a toxic mix of negative growth, rising unemployment and underfunded public services like education.

In our study we saw how education has suffered particularly badly. This is because recession drives up some forms of public expenditure, which governments find difficult to control. Faced with the EU demand to cut government spending, and the increasing costs of recession (such as increased social spending) many governments have used education cuts to square the circle of rising costs and falling income.

Between 2006 and 2015 spending on education as a % of Gross Domestic Product within the EU countries has been falling. This EU wide figure does mask significant differences between countries, but the general impact is a real problem.

An individual country case illustrates the situation. Italy is the fourth largest economy in the EU but one that has historically spent less of its income on education than many other EU countries. Between 2006 and 2015 Italy has reduced its spending on education as a % of its income. Since the crisis Italy's GDP has hardly grown and between 2012 and 2014 Italy's GDP was falling.  This means the country was spending a smaller proportion of its budget on education, at the same time as the total budget itself was shrinking. EU reports point out that Italy's education system does not perform well in some areas, but they rarely draw the obvious conclusion- that under-funded school systems under-perform.

However, this is not the whole problem. Our research also explored the development of privatisation processes in education EU countries after the crisis. Our data is based on a survey of 68 teacher unions across Europe representing all sectors of education.  It cannot offer definitive data on the extent of privatisation in education across the EU, but the findings highlight many issues and should ring alarm bells.

What appears to be happening is that as public investment is squeezed, and public education is starved of funds, students and their parents are being pushed towards private sector solutions. At the same time, private investors find ways to enter the market, eager to capitalise on the desperate demand of those who seek educational opportunities as their route out of austerity blighted lives.

The survey reveals the multiple, and complex, forms that education privatisation in education can take. Clear and visible is the common trend towards pushing costs onto service users (for example introducing or increasing tuition fees).  Less visible, but no less damaging to public education is the widespread use of contracting out (including for-profit private companies providing courses within public universities) and the downward pressures on educators working conditions' short term and casual contracts, particularly impacting women, were the most widely cited problem. In the report we present all the many forms that privatisation is taking in different countries and in different education sectors.

Europe faces a social crisis caused by years of austerity and a migration crisis caused by wars and poverty. Public education is needed now more than ever to help build strong, cohesive and inclusive communities. The danger is that public education continues to be denied the investment it needs, and that private providers seek to fill the gap. Such providers do not have the public service values that underpin public education. Their motivations are different. For profit driven edu-businesses those who matter are those who can pay. Such developments drive up inequalities and fracture communities.

The challenge is to reverse the cuts to public investment in education, across the European Union and beyond and make well-funded public education the foundation that coheres our complex and diverse communities. Education unions must be at the heart of the movement to make this happen. There is no alternative.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.